Channel 6 News: Omnia Family Wealth Discusses Sudden Wealth Syndrome

Omnia Family Wealth Co-Founder and Managing Director Michael Wagner was recently
interviewed by newscaster Ari Odzer for a two-part segment on Channel 6 News about the
best, and worst, ways individuals who experience a sudden increase in wealth can manage their
money.

The interview took place just hours before the most recent winning Mega Millions numbers
were to be announced. With potential earnings reaching around 1.6 billion dollars, Odzer
decided to speak with Wagner about the smartest financial strategy for lottery winners.

In the interview, Wagner discussed a commonly seen problem among the suddenly wealthy –
sudden wealth syndrome. Sudden wealth syndrome is a distress that commonly afflicts
individuals after they abruptly inherit wealth, sell a company, or…win the lottery. While,
according to Odzer, many people probably would not mind something called sudden wealth
syndrome, its effects can be devastating to families.

“Sudden wealth syndrome is when the suddenly wealthy find themselves suddenly bankrupt in
a few years. That’s really what you want to avoid,” warns Wagner. “So a lot of people might be
better off taking that annuity payment because it’s going to protect them from themselves.”

Rapidly coming into large sums of money can cause people to stress and make decisions they
might not have otherwise made, including reckless investments or overspending – leaving the
individual worse off financially than before the windfall.

As Wagner explains in the interview, the best way to combat this problem is by developing a
financial plan immediately after receiving the massive influx of wealth. “I think it’s good from a
psychological perspective to shave a little off, 5 or 10%, and really go nuts with that so
psychologically you still feel like you won the lottery and can spend some of the money,”
Wagner explained. “But it’s really important to take the other 95 or 90% and sock it away for
later”

 

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